The Road to Serfdom: Good Hayek or Bad Hayek?

A new book by Angus Burgin about the role of F. A. Hayek and Milton Friedman and the Mont Pelerin Society (an organization of free-market economists plus some scholars in other disciplines founded by Hayek and later headed by Friedman) in resuscitating free-market capitalism as a political ideal after its nineteenth-century version had been discredited by the twin catastrophes of the Great War and the Great Depression was the subject of an interesting and in many ways insightful review by Robert Solow in the latest New Republic. Despite some unfortunate memory lapses and apologetics concerning his own errors and those of his good friend and colleague Paul Samuelson in their assessments of the of efficiency of central planning, thereby minimizing the analytical contributions of Hayek and Friedman, Solow does a good job of highlighting the complexity and nuances of Hayek’s thought — a complexity often ignored not only by Hayek’s critics but by many of his most vocal admirers — and of contrasting Hayek’s complexity and nuance with Friedman’s rhetorically and strategically compelling, but intellectually dubious, penchant for simplification.

First, let’s get the apologetics out of the way. Tyler Cowen pounced on this comment by Solow:

The MPS [Mont Pelerin Society] was no more influential inside the economics profession. There were no publications to be discussed. The American membership was apparently limited to economists of the Chicago School and its scattered university outposts, plus a few transplanted Europeans. “Some of my best friends” belonged. There was, of course, continuing research and debate among economists on the good and bad properties of competitive and noncompetitive markets, and the capacities and limitations of corrective regulation. But these would have gone on in the same way had the MPS not existed. It has to be remembered that academic economists were never optimistic about central planning. Even discussion about the economics of some conceivable socialism usually took the form of devising institutions and rules of behavior that would make a socialist economy function like a competitive market economy (perhaps more like one than any real-world market economy does). Maybe the main function of the MPS was to maintain the morale of the free-market fellowship.

And one of Tyler’s commenters unearthed this gem from Samuelson’s legendary textbook:

The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.

Tyler also dug up this nugget from the classic paper by Sameulson and Solow on the Phillips Curve (but see this paper by James Forder for some revisionist history about the Samuelson-Solow paper):

We have not here entered upon the important question of what feasible institutional reforms might be introduced to lessen the degree of disharmony between full employment and price stability. These could of course involve such wide-ranging issues as direct price and wage controls, antiunion and antitrust legislation, and a host of other measures hopefully designed to move the American Phillips’ curves downward and to the left.

But actually, Solow was undoubtedly right that the main function of the MPS was morale-building! Plus networking. Nothing to be sneered at, and nothing to apologize for. The real heavy lifting was done in the 51 weeks of the year when the MPS was not in session.

Anyway, enough score settling, because Solow does show a qualified, but respectful, appreciation for Hayek’s virtues as an economist, scholar, and social philosopher, suggesting that there was a Good Hayek, who struggled to reformulate a version of liberalism that transcended the inadequacies (practical and theoretical) that doomed the laissez-faire liberalism of the nineteenth century, and a Bad Hayek, who engaged in a black versus white polemical struggle with “socialists of all parties.” The trope strikes me as a bit unfair, but Hayek could sometimes be injudicious in his policy pronouncements, or in his off-the-cuff observations and remarks. Despite his natural reserve, Hayek sometimes indulged in polemical exaggeration. The appetite for rhetorical overkill was especially hard for Hayek to resist when the topic of discussion was J. M. Keynes, the object of both Hayek’s admiration and his disdain. Hayek seemingly could not help but caricature Keynes in a way calculated to make him seem both ridiculous and irresistible. Have a look.

So I would not dispute that Hayek occasionally committed rhetorical excesses when wearing his policy-advocate hat. And there were some other egregious lapses on Hayek’s part like his unqualified support for General Pinochet, reflecting perhaps a Quixotic hope that somewhere there was a benevolent despot waiting to be persuaded to implement Hayek’s ideas for a new liberal political constitution in which the principle of the separation of powers would be extended to separate the law-making powers of the legislative body from the governing powers of the representative assembly.

But Solow exaggerates by characterizing the Road to Serfdom as an example of the Bad Hayek, despite acknowledging that the Road to Serfdom was very far from advocating a return to nineteenth-century laissez-faire. What Solow finds troubling is thesis that

the standard regulatory interventions in the economy have any inherent tendency to snowball into “serfdom.” The correlations often run the other way. Sixty-five years later, Hayek’s implicit prediction is a failure, rather like Marx’s forecast of the coming “immiserization of the working class.”

This is a common interpretation of Hayek’s thesis in the Road to Serfdom. And it is true that Hayek did intimate that piecemeal social engineering (to borrow a phrase coined by Hayek’s friend Karl Popper) created tendencies, which, if not held in check by strict adherence to liberal principles, could lead to comprehensive central planning. But that argument is a different one from the main argument of the Road to Serfdom that comprehensive central planning could be carried out effectively only by a government exercising unlimited power over individuals. And there is no empirical evidence that refutes Hayek’s main thesis.

A few years ago, in perhaps his last published article, Paul Samuelson wrote a brief historical assessment of Hayek, including personal recollections of their mostly friendly interactions and of one not so pleasant exchange they had in Hayek’s old age, when Hayek wrote to Samuelson demanding that Samuelson retract the statement in his textbook (essentially the same as the one made by Solow) that the empirical evidence, showing little or no correlation between economic and political freedom, refutes the thesis of the Road to Serfdom that intervention leads to totalitarianism. Hayek complained that this charge misrepresented what he had argued in the Road to Serfdom. Observing that Hayek, with whom he had long been acquainted, never previously complained about the passage, Samuelson explained that he tried to placate Hayek with an empty promise to revise the passage, attributing Hayek’s belated objection to the irritability of old age and a bad heart. Whether Samuelson’s evasive response to Hayek was an appropriate one is left as an exercise for the reader.

Defenders of Hayek expressed varying degrees of outrage at the condescending tone taken by Samuelson in his assessment of Hayek. I think that they were overreacting. Samuelson, an academic enfant terrible if there ever was one, may have treated his elders and peers with condescension, but, speaking from experience, I can testify that he treated his inferiors with the utmost courtesy. Samuelson was not dismissing Hayek, he was just being who he was.

The question remains: what was Hayek trying to say in the Road to Serfdom, and in subsequent works? Well, believe it or not, he was trying to say many things, but the main thesis of the Road to Serfdom was clearly what he always said it was: comprehensive central planning is, and always will be, incompatible with individual and political liberty. Samuelson and Solow were not testing Hayek’s main thesis. None of the examples of interventionist governments that they cite, mostly European social democracies, adopted comprehensive central planning, so Hayek’s thesis was not refuted by those counterexamples. Samuelson once acknowledged “considerable validity . . . for the nonnovel part [my emphasis] of Hayek’s warning” in the Road to Serfdom: “controlled socialist societies are rarely efficient and virtually never freely democratic.” Presumably Samuelson assumed that Hayek must have been saying something more than what had previously been said by other liberal economists. After all, if Hayek were saying no more than that liberty and democracy are incompatible with comprehensive central planning, what claim to originality could Hayek have been making? None.

Yep, that’s exactly right; Hayek was not making any claim to originality in the Road to Serfdom. But sometimes old truths have to be restated in a new and more persuasive form than that in which they were originally stated. That was especially the case in the early 1940s when collectivism and planning were widely viewed as the wave of the future, and even so thoroughly conservative and so eminent an economic theorist as Joseph Schumpeter could argue without embarrassment that there was no practical or theoretical reason why socialist central planning could not be implemented. And besides, the argument that every intervention leads to another one until the market system becomes paralyzed was not invented by Hayek either, having been made by Ludwig von Mises some twenty years earlier, and quite possibly by other writers before that. So even the argument that Samuelson tried to pin on Hayek was not really novel either.

To be sure, Hayek’s warning that central planning would inevitably lead to totalitarianism was not the only warning he made in the Road to Serfdom, but conceptually distinct arguments should not be conflated. Hayek clearly wanted to make the argument that an unprincipled policy of economic interventions was dangerous, because interventions introduce distortions that beget further interventions, producing a cumulative process of ever-more intrusive interventions, thereby smothering market forces and eventually sapping the productive capacity of the free enterprise system. That is an argument about how it is possible to stumble into central planning without really intending to do so. Hayek clearly believed in that argument, often invoking it in tandem with, or as a supplement to, his main argument about the incompatibility of central planning with liberty and democracy. Despite the undeniable tendency for interventions to create pressure (for both political and economic reasons) to adopt additional interventions, Hayek clearly overestimated the power of that tendency, failing to understand, or at least to take sufficient account of, the countervailing political forces resisting further interventions. So although Hayek was right that no intellectual principle enables one to say “so much intervention and not a drop more,” there could still be a kind of (messy) democratic political equilibrium that effectively limits the extent to which new interventions can be piled on top of old ones. That surely was a significant gap in Hayek’s too narrow, and overly critical, view of how the democratic political process operates.

That said, I think that Solow came close to getting it right in this paragraph:

THE GOOD HAYEK was not happy with the reception of The Road to Serfdom. He had not meant to provide a manifesto for the far right. Careless readers ignored his rejection of unqualified laissez-faire, and the fact that he reserved a useful, limited economic role for government. He had not actually claimed that the descent into serfdom was inevitable. There is no reason to doubt Hayek’s sincerity in this (although the Bad Hayek occasionally made other appearances). Perhaps he would be appalled at the thought of a Congress full of Tea Party Hayekians. But it was his book, after all. The fact that natural allies such as Knight and moderates such as Viner thought that he had overreached suggests that the Bad Hayek really was there in the text.

But not exactly right. Hayek was not totally good. Who is? Hayek made mistakes. Let he who is without sin cast the first stone. Frank Knight didn’t like the Road to Serfdom. But as Solow, himself, observed earlier in his review, Knight was a curmudgeon, and had previously crossed swords with Hayek over arcane issues of capital theory. So any inference from Knight’s reaction to the Road to Serfdom must be taken with a large grain of salt. And one might also want to consider what Schumpeter said about Hayek in his review of the Road to Serfdom, criticizing Hayek for “politeness to a fault,” because Hayek would “hardly ever attribute to opponents anything beyond intellectual error.” Was the Bad Hayek really there in the text? Was it really “not a good book?” The verdict has to be: unproven.

PS In his review, Solow expressed a wish for a full list of the original attendees at the founding meeting of the Mont Pelerin Society. Hayek included the list as a footnote to his “Opening Address to a Conference at Mont Pelerin” published in his Studies in Philosophy, Politics and Economics. There is a slightly different list of original members in Wikipedia.

Maurice Allais, Paris

Carlo Antoni, Rome

Hans Barth, Zurich

Karl Brandt, Stanford, Calif.

John Davenport, New York

Stanley R. Dennison, Cambridge

Walter Eucken, Freiburg i. B.

Erich Eyck, Oxford

Milton Friedman, Chicago

H. D. Gideonse, Brooklyn

F. D. Graham, Princeton

F. A. Harper, Irvington-on-Hudson, NY

Henry Hazlitt, New York

T. J. B. Hoff, Oslo

Albert Hunold, Zurich

Bertrand de Jouvenal, Chexbres, Vaud

Carl Iversen, Copenhagen

John Jewkes, Manchester

F. H. Knight, Chicgao

Fritz Machlup, Buffalo

L. B. Miller, Detroit

Ludwig von Mises, New York

Felix Morely, Washington, DC

Michael Polanyi, Manchester

Karl R. Popper, London

William E. Rappard, Geneva

L. E. Read, Irvington-on-Hudson, NY

Lionel Robbins, London

Wilhelm Roepke, Geneva

George J. Stigler, Providence, RI

Herbert Tingsten, Stockholm

Fracois Trevoux, Lyon

V. O. Watts, Irvington-on-Hudson, NY

C. V. Wedgewood, London

In addition, Hayek included the names of others invited but unable to attend who joined MPS as original members

“Solow does show a qualified, but respectful, appreciation for Hayek’s virtues as an economist, scholar, and social philosopher,.”

????

Solow does no such thing.

Essentially nothing from Solow on: institutions, rules, heterogeneous capital, the market as a discovery process, Hayek’s re-casting of the explanatory problem & causal explanatory strategy, the rule of law, intellectual history, Hayek’s account of how the philosophical tradition & a poverty of examples from science has mislead economists into turning their science into a fake and failed pseudo-science, etc, etc. I.e. all of the core contributions of Hayek are utterly missing from Solow. No wonder Solow’s piece is such an intellectual embarrassment, being nothing but caricature and false history.

This is a false ‘interpretation’ of Hayek — self-evidently false. It’s dishonest to describe this in any other way than as *false*. And note well — it is direct evidence against the false idea that Solow has given an ‘nuanced’ or ‘complex’ account of Hayek’s ideas.

David writes,

“This is a common interpretation of Hayek’s thesis in the Road to Serfdom.”

Hayek explicitly tells us that there were economics departments across the country were he felt despised & unwelcome — Robert Solow & Paul Samuelson were exactly the sorts of economists who made Hayek feel so.

While I don’t have Greg’s perspective and it’s been two years since I read The Road To Serfdom, some thoughts: when do government interventions become too much? I’m like a broken record in insisting that lots of interventions happen at local levels, by local people, to protect those who are already thriving, and perhaps Hayek explains that process in other work. However in this book, he falls short in that while supportive of a degree of planning, he takes that level of planning as a given and does not explain how it actually serves greater economic freedoms. By not providing that explanation, he loses a potential argument that would have served him well with both the Left and the Right.

So when I read his limited defense of planning, I took that as a given because government of any kind needs that kind of balance. But a lot of people don’t accept that the way I do, and Hayek could have done a better job of addressing a wider audience…the ‘bad’ Hayek?

Any one with good sense would not welcome Hayak at any university for he was was nothing but a ringer

as for your reformulation of Hayak’s central thesis that comprehensive central planning could be carried out effectively only by a government exercising unlimited power over individuals that simply is not true.

Stop for a minute. In the Obamacare case it was agreed by all that the States had the power, under their police power, to adopt compulsory insurance laws. Such does not mean that the states have unlimited power over individuals.

Hayek wouldn’t pass the first day of law school. Human Freedom comes from a combination of two factors, both political/legal. A social covenant or agreement upon what freedoms people are to have and political institutions capable of insuring those freedoms. The former is meaningless without the later and the later is required to prevent public and private crushing of freedom.

Look at Egypt right now. It does not have the political institutions capable of freedom.

To be blunt, Hayek would be less useful than toilet paper in Cairo today.

“You’ve got to be kidding. Solow does nothing but caricature Hayek — and leave out almost ALL of the key elements of Hayek’s “complexity”.

Almost ALL of it.

This is intellectual embarrassing stuff from Solow, and anyone well grounding in Hayek’s work would easily see it”.

Actually, I would put it differently. He recognizes Hayek’s complexity, and gives one or two examples. In case you weren’t paying attention, the review did not purport to be a study of Hayek. Why does that bother you so much?

You said:

“Can’t we we honestly state and record the explicit function of the MPS, which is public record? Solow doesn’t know it, and it seems David doesn’t either.”

Well, then, why didn’t you. Do it yourself, don’t make me do your work for you.

Here is what I found on the MPS website:

“Its sole objective was to facilitate an exchange of ideas between like-minded scholars in the hope of strengthening the principles and practice of a free society and to study the workings, virtues, and defects of market-oriented economic systems.”

Which doesn’t sound all that different from what I said a bit more colloquially.

You said:

“This is a false ‘interpretation’ of Hayek — self-evidently false. It’s dishonest to describe this in any other way than as *false*. And note well — it is direct evidence against the false idea that Solow has given an ‘nuanced’ or ‘complex’ account of Hayek’s ideas.

“David writes,

“’This is a common interpretation of Hayek’s thesis in the Road to Serfdom.’”

Oh please. Don’t accuse me of dishonesty for not agreeing with you. There is room for misunderstanding because Hayek did move back and forth between straight arguments about central planning and arguments about the tendencies toward central planning unleashed by unprincipled intervention. I think that the arguments are distinct and should be distinguished, but the difference is not so unmistakable that it could be overlooked in perfectly good faith.

You said:

“You left out that Samuelson attempted to smear Hayek as an anti-semite …”

I left it out, because he did not attempt, much less succeed, to smear Hayek as an anti-semite. In characteristic fashion, Samuelson gave Hayek a pat on the back for largely overcoming the anti-semetic milieu in which he was raised. Perhaps those widespread attitudes in the Vienna of Hayek’s youth left some residue; I am not aware of any myself, but Melvin Reder on whom Samuelson was relying thought that there was. I didn’t like Reder’s article, but he was not politically hostile to Hayek and had no reason to smear Hayek, and even he did not attribute malice to Hayek. Samuelson was just saying that Hayek did a better job of cleansing any residue of cultural antisemtiism picked up from the environment in which he was raised than did his hero Keynes or his teacher Schumpeter. To accuse Sameulson of attempting to smear Hayek of anti-semitism is really uncalled for, and I resent it.

You said:

“Hayek explicitly tells us that there were economics departments across the country were he felt despised & unwelcome — Robert Solow & Paul Samuelson were exactly the sorts of economists who made Hayek feel so.”

This is amazing. An unsourced paraphrase of what “Hayek explicitly tells us” and then a baseless identification of Samuelson and Solow as the unnamed economists who made him feel unwelcome. Greg, you really do need to lighten up a bit.

Becky, I am not sure what you mean by “Hayek’s limited defense of planning.”

John, Excuse me for my illiteracy, but what do you mean by “ringer?”

The rest of your comment, I am afraid, is about as coherent as Greg’s outburst.

What does Obamacare have to do with central planning? Or can you not tell the difference between Hayek and Glenn Beck. Hint: one of them spoke with a very peculiar, but charming, German accent.

You might be interested in learning that Hayek’s advanced degree was a doctor of jurisprudence from the University of Vienna, so his ability to survive in law school doesn’t seem to me to be in any doubt. From the rest of your comment (not to mention the disgusting vulgarism at the end) the only doubt I have is whether you have ever read a word that Hayek wrote.

There is nothing there but vague generalities, wholly meaningless to anyone actually interested in establishing freedom. I put him in the same category as Glen Beck.

A ringer is a contestant entered in a competition under false representations of identity, record, or ability. Most people who have studied how Hayek was hired to go to Britain to develop a POV in opposition to Keynes realize that he was a ringer, it being misrepresented that his POV had been freely or honestly arrived upon. In fact, his POV was purchased, what Munger charitably calls incentive caused bias.

Beyond that, I am asking the simple rhetorical question, Would Hayek (or Friedman) be of any use to the people in Egypt today who are struggling and, most of us fear, about to loose any chance at freedom?

The answer is no.

Libertarians have never been able to make really positive steps toward freedom anywhere. In fact, their POV is especially vulnerable to right wing capture.

There is only one method for freedom: the paradox of embracing government while at the same time limiting its powers and creating institutions with governmental power that protect freedoms.

Nor would Hayek’s legal education be of any moment, there being a world of difference in the common law and constitutional traditions of England and the United States and pre-war Eastern Europe.

In sum, I will be blunt. Paying any attention to Hayek is an immense insult to our numerous Founding Fathers and others (Lincoln, FDR, and Truman all come to mind) who have really worked to create, maintain, and expand freedom.

Hayek has a following because they can take his words, because they are so general, and us them to their rationalize their own narcissistic greed.

To paint a completely accurate picture. The people in the Tahrir Square, risking everything, are not in any way helped or a part of any Hayekian intellectual tradition.

I will make one last point. It takes only the most simple of examples to prove Hayek either a fraud or wrong. Hayek and any follower of Hayek is a racist, for they oppose laws that make race discrimination illegal (or they are not a true Hayekian) (for a true Hayekian, property trumps all other human rights). In fact, you must go further. To be a true Hayekian one must worship blunt economic power, for the state is denied the power to insist on safe working conditions, to ban pollution of the environment, to insist on wage and hour laws. A true Hayekian would support the favorite trick of employers, pre wage and hour laws. Employees would be required to sign one year employment contracts. which made a condition of their being paid that they work the full year. During the period of employment the employer would advance or loan subsistence. At the year end approached the employer would intolerably alter working conditions, making it more dangerous, etc., forcing people to quit.

That’s the world of Hayek you worship. I could go on but you are so uninformed about law and freedom the discussion is besides the point.

Quite a bait-and-switch: you make a lot of bald assertions about Hayek, David Glasner and in fact just about everything under the sun, as if challenging people to the mother of all debates, only then to close down any discussion with-

“That’s the world of Hayek you worship. I could go on but you are so uninformed about law and freedom the discussion is besides the point.”

– so any further discussion is at best superfluous, since you are so informed and those whom you disagree with are so ignorant & dogmatic. You get to have the satisfaction of making your voice heard with maximum bluster, without the uncomfortable experience of having to take critical replies seriously or argue persuasively rather than playing to the gallery. I hope, however, that the topic interests you enough to tempt you into arguing politely and logically, without insults and pseudo-arguments: that is beginning from non-shared premises to an unpleasant conclusion for the other side, e.g. “Your name is John; people named John are always wrong; therefore, you must be wrong” is a very poor argument.

David Glasner and Greg Ransom,

Re: Hayek and anti-semitism, I think it is correct to say that the residue of the bad old days in Vienna remained in Hayek, but given that he came out of an intellectually segregated city he was exceptionally non-anti-semitic, perhaps in part to having had so much positive contact with Jews from a young age. What sometimes looks like anti-semitism from Hayek is more complex-

CHITESTER: … Going back to the question I asked you about people
you dislike or can’t deal with, can you make any additional
comments in that regard, in terms of the characteristics
of people that trouble you?

HAYEK: I don’t have many strong dislikes. I admit that
as a teacher — I have no racial prejudices in general — but
there were certain types, and conspicuous among them the
Near Eastern populations, which I still dislike because
they are fundamentally dishonest. And I must say dishonesty
is a thing I intensely dislike. It was a type which, in
my childhood in Austria, was described as Levantine, typical
of the people of the eastern Mediterranean. But I encountered
it later, and I have a profound dislike for the typical
Indian students at the London School of Economics, which I
admit are all one type–Bengali moneylender sons. They
are to me a detestable type, I admit, but not with any
racial feeling. I have found a little of the same amongst
the Egyptians–basically a lack of honesty in them.

– which can be interpreted in various ways. If one is being very uncharitable, it’s flagrantly racist, and all the worse for beginning with a disavowal of racism. If one is being very charitable, Hayek is saying that he has generally found people from some cultures to be dishonest, but he recognises that this is a cultural rather than a racial feature in these peoples; it is similar to how, in another interview, he described the Austrian military class as dishonest because they tended to not pay there debts, which is presumably not to be interpreted as anti-Teutonic racial prejudice.

The truth is naturally between these extremes, but I lean towards the more charitable view. The reason why most of us would never express such a point about different cultural standards of honesty that way is ironically that we apply methodological individualism more consistently than Hayek did on this occasion: one should stress that, even within cultures, there are very great variations in behaviour, and that people who come from cultures can greatly transcend any flaws in their culture- just as Hayek greatly transcended the vile anti-semitism of old Vienna.

“In this footnote on ad hominem matters, some few additional remarks may be useful. Most of my gifted mentors, born in the nineteenth century, lacked today’s “political (and ethnic) correctness.” There were of course some honorable exceptions among both my Yankee and European teachers. Reder (2000) has provided a useful exploration of such unpleasantries. Central to his expositions were appraisals of the triad John Maynard Keynes, Joseph A. Schumpeter and Friedrich Hayek on the subject of anti-semitism.Unexpectedly, I was forced in the end to conclude that Keynes’s lifetime profile was the worst of the three. In the record of his letters to wife and other Bloomsbury buddies, Keynes apparently remained in viewpoint much the same as in his Eton essay on that subject as a callow seventeen-year-old.

Hayek, I came to realize, seemed to be the one of the three who at least tried to grow beyond his early conditioning. The full record suggests that he did not succeed fully in cleansing those Augean Stables. Still, a B grade for effort does trump a C-grade.”

Reder falsely identifies Hayek as an anti-semite for a one sentence recounting a well known sociological fact about the various population groups in Vienna, a fact well recognized & documented in the literature on Vienna, eg see *Karl Popper The Formative Years 1902-1945* by Malachi Haim Hacohen. That is essentially Reder whole non-case against Hayek.

Hayek’s identified purpose for the MPS was to give isolated academics and intellectuals a place where they could present and discuss their work with others who shared their liberal research interests and their liberal outlook and concerns. Hayek believed in conversation and seminars and the importance of a shared background of understanding by a group of people, and he believed it was important for intellectual growth for people to have a community where they could present and discuss their ideas.

It was directly aimed at the isolated figure, the lone professor or journalist at some school or newspaper or whatever. Hayek recounts traveling America and encountering these isolated figures who had no one to discuss their work with, no on to give their papers to, etc.

And the purpose was to have a place where they could do this, protected from the blackball of people who might object to their saying something politically incorrect.

And explicitly the MPS was not to publish papers, was not to have their meetings covered in the press, what not to set up a ‘propaganda’ arm, all of the things which Solow lists as things marking the failure of the MPS.

The focus was to be on developing ideas by presenting papers and developing a shared conversational community stretching the world.

This isn’t ‘networking’, this isn’t psychological support — it’s building a scientific and cultural community of the sort discussed by Thomas Kuhn, the very foundation of the possibility of the growth of science and knowledge.

Can anyone explain why it is that some on the left hate Hayek so much? I don’t get it.

From my perspective, Hayek is exactly the sort of right-wing person I want to have a dialog with. Unlike Burke, de Maistre, and that flavor of conservative, he doesn’t waste time appealing to privilege or tradition. He uses the same outcome-based approach to judge the merits of different programs as, say, John Stuart Mill. He is not elitist, making him preferable even to Greg Mankiw — you’re not going to find Hayek saying that there’s a genetic caste system, or anything like that. He acknowledges that things are not black and white, and makes all sorts of allowances and qualifications to his main recommendations, unlike even the typical libertarian (in my experience), who presents things in absolute, stark terms. He was not rigid (except, perhaps, about Keynes), and adapted his views in light of new evidence.

I don’t see what it is that like-minded people find objectionable there. In truth, I think that — with the important exception of macroeconomic policy — modern American liberals probably share more ground with Hayek than modern conservatives do.

As Mark Twain counseled, ““Do not argue with an idiot they drag you down to their level and beat you with experience.”

If one cannot distinguish between people who really thought about government and freedom, men like Washington, Hamilton, Franklin, Morris, Marshall, Lincoln, FDR, and Truman, on the one hand, and Hayek, I cannot help you.

As Warren Buffett says, all of the former wrote a check. Hayek wrote for a check. If you cannot see the importance of that distinction, you are beyond my help.

I could go on. Hayek falsely reasoned that financial markets returned to equilibrium.Soros, Buffett, and Munger have written checks showing that they don’t. That was Hayek’s core premise. His entire argument is built on a false premise. I could add that I have worked in above, below, around banking for 35 years. Soros, Buffett, and Munger are right, based on my personal observation.

I could go on, but what is the point. There is no critical reply possible to my POV, for any response is based on a false premise. Hayek doesn’t advance the ball, as has been explained a million times. There is no need for me to repeat Keynes.

Let me pick up on one narrow but important point. Hayek was a racist and say the need for an intellectual justification for such, so he advanced his argument that property trumps human rights. This is a wonderful shield for all racists.

A true philosophy is one they filters out racists and makes them identifiable, exposes them for what they are. Applying Hayek, how does one tell a racist? To be specific, take the racist customer problem. In Hayek’s world view, it is okay for customers of a restaurant to be racist and to boycott a firm that serves those against such racism is directed. This was the South under Jim Crow. Firms that did business with blacks were boycotted, for such covered and hid racism.

It would seem to me that a just or true philosophy would expose, not hide racism. Again, I could go on, but this is old ground and I am right.

I’ll end where I started. Of what use is Hayek to the people seeking freedom in Tahrir Square, today? Are private police the answer? Why are we not seeing blogs and news stories that the solution is private police?

There is nothing complex, nuanced, or useful about Hayek. I challenge anyone to find anything applicable to Egypt, today, that was not said earlier and better and in a more useful way by someone else, most often one of our Founding Fathers

It seems that the failed experiment in private law and money (Hayakism) has failed.

Comments on the strike by the judiciary:

“The country cannot function for long like this, something has to give,” said Negad Borai, a private law firm director and a rights activist. ‘We are in a country without courts of law and a president with all the powers in his hands. This is a clear-cut dictatorial climate,” he said.

Mohamed Abdel-Aziz, a rights lawyer, said the strike by the judges will impact everything from divorce and theft to financial disputes that, in some cases, could involve foreign investors.

Hayek has got to be loving this. A country without Courts, totally private law, and a Dictator.

Chile anyone?

Colonel Benavente reveals that his former subordinate, Captain Antonio Palomo Contreras, participated in secret missions to eliminate political prisoners.

“Yes, and it was Palomo who had the orders to make them disappear, using his helicopter. Some of these bodies were dropped into the ocean; others were thrown on the high peaks of the Andes. Palomo should remember this perfectly well.”

There are still more nauseating secrets to be unravelled from the Pinochet’s period, that veritable Pandora’s box. The latest came to light in the Chilean paper La Tercera of 25th June 1999 which published declarations of retired Colonel Oglanier Benavente that are very damaging for two retired Chilean generals, both under arrest; Augusto Pinochet in England and Sergio Arellano Stark in Chile. The former does not need introduction. Arellano Stark was the infamous officer who, shortly after the coup of September 1973, presided over a delegation which went to different provinces to put pressure on commanders who were considered to be excessively lenient in handling the defeated Allende’s supporters. Arellano Stark’s delegation, known as the Caravan of Death, illegally executed 72 political prisoners in October of 1973, a deed that heralded the sinister character of the newly born regime.

Colonel Benavente, now 70 years old, was then the Governor of Talca Province, 150 miles south from Santiago, the capital of Chile. “I have nothing to hide,” he said, thus breaching a tacit pact of silence regarding the atrocities committed during the Pinochet era 1973-1990. For the first time, an ex-army officer has confirmed the method used in Chile to eliminate political prisoners. An undetermined number of disappeared detainees were dropped from helicopters during the military dictatorship. Colonel Benavente revealed that his former subordinate, Captain Antonio Palomo Contreras, participated in secret missions to eliminate leftist prisoners.

Oh does the truth have to hurt some.

Hayek and Friedman found this kind of dictatorship, kept in power by dropping opponents from helicopters, more acceptable than democracy.

To be fair, the fact that Glenn Beck keeps on bringing up Hayek makes ME question the value of reading him. Then I remember that guilt by association is not a reliable way of determining intellectual worth.

John,

By your own admission, there is no space for reasonable argument with you, so I’ll count my chops and quit before I start playing.

John, If you say that you have read Hayek, I will take you at your word, but your comprehension of him leaves a lot to be desired. I really don’t know what you are talking about when you call Hayek a ringer based on how he was hired. Hayek had already established a reputation before he arrived in England, and the lectures he gave at LSE before he was offered a position created a sensation attracting some very outstanding disciples, many of whom later changed their minds about Hayek’s theory of business cycles but without ever questioning Hayek’s scholarship or his intellectual integrity. So you are assassinating his character based on zero evidence as far as I can tell. Who are the unnamed “most people who have studied how Hayek was hired” on whom you are relying?

As for whether Hayek or Friedman would be of any use to the people in Egypt struggling for freedom today, I haven’t the faintest idea of how you are in any position to tell one way or the other. You certainly have not provided any evidence that, or even the hint of an argument why, Hayek would not be of use to them.

I am not a libertarian and neither was Hayek, so I don’t know what relevance your characterization of libertarians would have even if I stipulate to its validity for purposes of this discussion.

You said:

“There is only one method for freedom: the paradox of embracing government while at the same time limiting its powers and creating institutions with governmental power that protect freedoms.”

If you think that you have somehow excluded Hayek from the category of being an advocate of freedom based on this proposition, you are simply showing how meager and impoverished your understanding of Hayek really is.

That Hayek usually wrote at a high level of abstraction is well-known. That may make his work less useful than it would have been if he had provided more in the way of concrete analysis of specifics. But that hardly disqualifies him as an authority worthy of consideration. And again your invocation of the Egyptians now seeking liberty is simply a red herring, the kind of meaningless generality you are accusing Hayek of having propounded.

You falsely characterize Hayek as a racist based on his support of private property rights. I don’t know what Hayek’s position on anti-discrimination laws was, and if you do know, I would appreciate it if you would provide documentation for your characterization. There are a number of ways that the infringement on the property rights of businesses caused by anti-discrimination laws could be defended on libertarian grounds, so unless you have evidence that Hayek opposed such laws, your whole premise is unfounded. And even if your premise were true, your inference would not follow, any more than a defender of freedom of speech could be held responsible for every opinion written or spoken under protection of the First Amendment.

Hayek explicitly endorsed laws against unsafe or abusive working conditions, and even denied that minimum wage laws necessarily violated the principles of a free market economy. So your prejudiced accusation that Hayek favored the abuse of workers by their employers is just one more example of your unfounded bias against him.

Nor do I worship Hayek or his work. If you do a search on Hayek on this blog, you will find that I have criticized his views on a number of practical and theoretical issues. One of the most admirable things about the man was that he did not demand or even expect other people, his students included, to agree with him. He was not perfect by any means, but there is a lot you could learn from him about tolerance and respect for opinions other than your own.

W. Peden, When I first read that interview years ago, I felt a bit uncomfortable about it. I couldn’t quite understand why Hayek allowed himself to share those feelings which were better left unspoken. I don’t think, in an of themselves, they support a charge of anti-semitism for which I believe there is no evidence from any actual conduct in which Hayek engaged. But the tenor of the remarks is nevertheless disturbing and regrettable.

Greg, No I did not forget what Samuelson wrote. I think that his choice of words was regrettable, but my reading of what Samuelson wrote is that he was absolving Hayek of moral blame for whatever residual prejudices he may have harbored, which had been acquired in his upbringing. That is a long way from racism or anti-semitism in the normal understanding of those terms.

To say “he did not succeed fully in cleansing those Augean Stables” is not to condemn the man, but to offer qualified praise. I disagreed with Reder’s conclusion, but it was not entirely unfounded. I would give Hayek more credit than Samuelson did, but read fairly, even Reder was not condemning Hayek, but trying (unsuccessfully in my view) to understand what Hayek thought and believed.

About MPS, I really don’t see a lot of difference between your understanding of the MPS and my slightly tongue-in-cheek description. It’s very difficult to measure the contribution of an association like MPS, and in the context of his review, it was not unfair of Solow to question its success, especially in the light of some of the comments that he quotes about the deterioration of the quality of the discussions at MPS over time, which allegedly shifted from a search for moral underpinnings for a liberal polity to cheerleading for free markets, especially after Friedman’s ascendancy in 1970. This may or may not be a correct account of what happened, but whether it is or isn’t cannot be determined by reading the mission statement of the MPS.

Will, Actually Hayek thought that Burke was a good liberal. He was after all an old Whig, which is how Hayek described himself. With that caveat, I pretty much agree with everything you say.

John, To me it seems that you are writing out of malice and prejudice against Hayek that has no basis in what he thought or wrote. Hayek actually wrote a paper (“Economics and Knowledge”) in which he showed that, as a matter of economic logic, there is no necessary tendency for markets (including especially financial ones) to achieve equilibrium, so your accusation that Hayek reasoned that financial markets return to equilibrium is patently false. So even if I stipulate to your rather grandiose self-assessment of your own powers of observation, your assessment of Hayek is based on patent ignorance.

And if you are suggesting that Hayek advocated private police and private courts, I don’t know which universe you are residing in, but it’s not the one in which I reside.

About Pinochet, everyone acknowledges that Hayek was badly mistaken. However, most of the facts that you cite were not known at the time, and Allende was far from a paragon of democratic virtue. He was elected with less than 40% of the popular vote, but nevertheless was trying to transform the Chilean economy based on some sort of Marxist vision. This does not exculpate Pinochet for his crimes, but one should not forget that neither side was blameless. And it is not clear what the result would have been if Allende had remained in power.

I am going to attempt to turn this into a useful conversation to bring into focus the real difference I have with you over Hayek.

My POV is that the fundamental flaw in your thinking is that, unlike physics or chemistry or many other subjects (where the character matters not a whit), in economics character is everything because there is little science and lots of bias and prejudice. Newton could have been a lying cheating dog for all we care. It wouldn’t matter because we can test his equations. Given the subjectivity of economics, the judgment and character of the economist is everything. I expect that in your personal life you do not hesitate to apply Munger’s filters, disregarding stock tips from your broker. Why should I be held to a different rule about a hack for the Koch brothers.

My attack on Hayek is direct and personal. His judgment and character, in my view, make him unworthy of attention. And, since I view these as personal shortcomings, I believe it appropriate to attack him on a personal level.

Truth on these subjects, like art, is in the eye of the beholder.

In different words, it is perfectly proper for me to reject, and urge others to reject Hayek because the one gov’t he ever supported dropped people from helicopters. That is what is so absolutely foolish about your ever writing about the man. He claimed to be able to see the path to serfdom. Yet, the one time he saw the path to heaven on earth, people soon started dropping to the earth out of helicopters. Why pay attention to a person whose judgment and character are so fundamentally flawed?

I will give a personal example. The Vietnam War was my high school, college, and much of law school. I thought it nuts because it was so apparent from the forces of history that, regardless of who won, in 30 years everyone in Vietnam would still end up working in Nike factories. That is judgment. Similar people had judgment in the years before the Civil War. They saw where events were driving, the flow of history.

Hayek had no judgment about the flow of history. None.

Let me close with a different example. Being a trial lawyer, I have read tens of thousands of pages on persuasion and rhetoric, some written by people who are real scoundrels (e.g., F. Lee Bailey, disbarred). When I do such I immediately filter out anything said about truth, justice, or the American way. Con men are con men. But I will pay attention to the techniques they use to talk to a jury, for the same reason that Patton read Rommel’s book.

You, it seems to me, go looking for needles in a hay stack, apparently thinking that you should be neutral. You charge me with bias, but it is not bias to conclude that someone is a con, lacking in character and judgment. This are ordinary, everyday judgments. Would you let a babysitter in your house whom you judged to lack character and judgment?

David, my sense is that when Hayek went to the history books he did so looking for friends and allies — as do many who feel intellectually lonely. In the early Burke he certainly found one. The Burke of around 1776 is basically on the same page as Adam Smith about most things. But as institutions he cared about came under attack, Burke became less Whiggish on some matters. The Burke of 1796’s Letters on a Regicide Peace, opposing peace with France unless England could force a monarchy on the French, is much less liberal. I doubt Hayek would have taken similar positions.

And thanks to W. Peden for answering my question. It’s actually quite easy to understand: if someone like Beck recommends three books, and those are a Bircher conspiracy tract from the 60s, an anti-Semitic, pro-Nazi conspiracy tract from the 30s, and Hayek, and you know nothing of the latter, it is natural to conclude that it’s probably garbage. But then, if Road to Serfdom appeals to people like Beck, maybe that’s enough to make it Bad Hayek.

Greg, What kind of stupid question are you asking me? I obviously didn’t say and I obviously don’t think that Hayek was an anti-semite, so why are you even asking me about Hacohen? You are being very tiresome, Greg. My memory of correspondence with Reder from more than 10 years ago after he published the article is that his position was that Hayek had possibly absorbed certain anti-semitic stereotypes from the Viennese environment in which he was raised. Those stereotypes are not necessarily inconsistent with generally positive feelings towards Jews. I don’t think such attitudes warrant the accusation of anti-semitism; Reder obviously had a somewhat different view, which, based on my exchange with him, I believe he held honestly. But I am not going to submit to cross-examination on his behalf by you or anyone else. So move on.

Note well, Hayek had a good relation with his own Bengali students, relations which continues over the years. The daughter of one of these students, who deveopled Hayek’s ideas n her own, has helpfully discussed some of the absurdity of Hayek’s comment here:

” I have a profound dislike for the typical
Indian students at the London School of Economics, which I
admit are all one type–Bengali moneylender sons.”

So far we have evidence of Hayek being culturally prejudiced against Turks, Arabs (that’s the Near East as Austrians knew it) and Bengali’s — still not much of a ‘foundation’ for the as yet unsupported charge that Hayek was an anti-Semite at any point in his life, and buckets of evidence that Hayek was one of those breaking down barriers in Vienna, among much other evidence against the notion that Hayek was an anti-Semite.

I haven’t come across the anti-Sematic actions or verbal race hate or whatever to lend any support to the claim that Hayek at any point was an anti-Semite,

If someone has that evidence, send it to me.

Perhaps Hayek secretly hated Jews and secretly sympathized with the Nazis. There is no evidence of that, and evidence against that,

But folks since the 30s have loved to associate Hayek with the Nazis.

I’m not sure how different this effort is.

(The fact that someone is familiar with racial stereotypes well, known to everyone, I dare say, does not make one a racist or anti-Semite.)

Reder did not say or imply that Hayek hated Jews or was a Nazi-sympathizer, so you are engaging in just the sort of character assassination for which you condemn Reder. So why are you even mentioning such an absurdity?

As indicated by my last comment, I have resolved to move on. You don’t like my comments so I am sure I won’t be missed.

In leaving I do have a couple of comments, sort of an intellectual firing.

First, I am right and your are smart, smart enough to know I am right and that you need to change.

1. You are a man with a hammer. Thus you know a lot about a very little and what you know is not helpful or useful.

2. Your attempt to critique Hayek was just trumped by Prof. Coase, at 101, in the Harvard Business Review (Dec. Issue):

In the 20th century, economics consolidated as a profession; economists could afford to write exclusively for one another. At the same time, the field experienced a paradigm shift, gradually identifying itself as a theoretical approach of economization and giving up the real-world economy as its subject matter. Today, production is marginalized in economics, and the paradigmatic question is a rather static one of resource allocation. The tools used by economists to analyze business firms are too abstract and speculative to offer any guidance to entrepreneurs and managers in their constant struggle to bring novel products to consumers at low cost.

This separation of economics from the working economy has severely damaged both the business community and the academic discipline. Since economics offers little in the way of practical insight, managers and entrepreneurs depend on their own business acumen, personal judgment, and rules of thumb in making decisions. In times of crisis, when business leaders lose their self-confidence, they often look to political power to fill the void. Government is increasingly seen as the ultimate solution to tough economic problems, from innovation to employment.

Economics thus becomes a convenient instrument the state uses to manage the economy, rather than a tool the public turns to for enlightenment about how the economy operates. But because it is no longer firmly grounded in systematic empirical investigation of the working of the economy, it is hardly up to the task. During most of human history, households and tribes largely lived on their own subsistence economy; their connections to one another and the outside world were tenuous and intermittent. This changed completely with the rise of the commercial society. Today, a modern market economy with its ever-finer division of labor depends on a constantly expanding network of trade. It requires an intricate web of social institutions to coordinate the working of markets and firms across various boundaries. At a time when the modern economy is becoming increasingly institutions-intensive, the reduction of economics to price theory is troubling enough. It is suicidal for the field to slide into a hard science of choice, ignoring the influences of society, history, culture, and politics on the working of the economy.

It is time to reengage the severely impoverished field of economics with the economy

In sum, the great irony about Hayek is that by being so vague and ambiguous, together with reliance on price, he has been entirely useless and, thus he has brought about exactly what he claimed he was against: Government.

Of what he wrote above the following two sentences by Coase are a statement of genius:

In times of crisis, when business leaders lose their self-confidence, they often look to political power to fill the void. Government is increasingly seen as the ultimate solution to tough economic problems, from innovation to employment.

The Greeks would praise the Gods for this moment of irony. Hayek hoisted on his own petard. Actually hoisted by the fact that he was a fraud and a charlatan. He was intentionally vague and ambiguous because he was a con man.

And, if he wasn’t a con man, how is it that he has become the tool of Glen Beck.

I am sorry if I misunderstood you, but your previous comment following our exchange about Reder and Samuelson was loaded with references to hating Jews and Nazi sympathies. For the life of me, I don’t know what possessed you to put that comment on my blog.

David, According to Malachi Haim Hacohen in his biography of Popper, in Vienna in the 1910s and 1920s there weren’t overlapping associations and social organizations which where a mix of Jewish ethnic background and non-Jewish ethnic background. Hayek created one when he was barely 20.

Hayek later helped organize an economists organization that was ethnic and scientifically mixed, where the University was blackballing Jewish economists & marginalist economists.

This was the period when Samuelson gives Hayek a solid “C” as an anti-Semite.

As I’ve said, there is no evidence in action or word for the charge of anti-semitism.

Hayek was later active in working to network folks to get out of Austria or to remake their lives after leaving Austria. Many if these were his friends.

Career wise, Popper says that Hayek literally saved his life.

So I’m ridiculing the notion that stated notion that Hayek is an anti-Semite by pointing to the absurdity — lacking any evidence and with spectacular counter evidence — of the charge that Hayek was an secret hater.

About as likely as that he was a secret Nazi sympathizer.

It’s the English language, there is nothing unusual about ridiculing something with the example of absurdity. It’s as common as run in Seattle.

What remains is the abundant evident in a lived life that we are not dealing with a Vienna anti-Semite as Samuelson charges, based on no evidence,

We have abundance of evidence on one side, no evidence on the other.

If we are then going to go ahead and charge Hayek with being an anti-Semite, based on no evidence, why stop there,

John, Your comments about ideas will be missed, but your vicious and unfounded personal attacks on Hayek will certainly not be.

You quote Ronald Coase, for whom I have the deepest respect and admiration, as a critic of Hayek, even though Coase does not
even mention Hayek at all in the passage that you quote.

Well, here is what Coase explicitly wrote about Hayek on another occasion “Economics at LSE in the 1930s: A Personal View” in Essays on Economics and Economists by Coase.

“At LSE in the 1930s, economists were very receptive to new ideas. For this a great deal of the credit must go to Hayek. Today, we tend to think of Hayek as the author of such works as the The Road to Serfdom and the Constitution of Liberty. But at that time these books had not appeared and the important part he played at LSE in the early 1930s was in encouraging rigour in our thinking and in enlarging our vision. Unassertive, Hayek nonetheless exerted considerable influence through his profound knowledge of economic theory, the example of his own high standards of scholarship, and the power of his ideas.”

Game, set, match to Hayek. You, sir, have been hoisted on your own petard.

Greg, I don’t need to be lectured about Hayek’s good will and sterling personal qualities. That is not the point. The issue is whether, despite his personal qualities, there were traces of anti-semitism in his thought and speech. I don’t think there were, but some people, for reasons I disagree with, believe in good faith that there may have been such traces.

Atticus Finch in To Kill a Mockingbird is a hero of staggering courage and humanity in defending a black man accused of raping a white woman. Nevertheless there are those who see in him subtle traces of racism in his attitudes toward blacks and in his willingness to cooperate with the racist legal system in which he was enmeshed. See for example this quote from the Wikipedia article on To Kill a Mockingbird. A little searching would undoubtedly turn up more detailed critiques of Finch:

“Critics of Atticus maintain he is morally ambiguous and does not use his legal skills to challenge the racist status quo in Maycomb.”

I don’t agree with that viewpoint, but I don’t necessarily condemn people who hold such a view.

You, on the other hand, have just blatantly misrepresented what Samuelson wrote about Hayek, and, as a matter of personal decency, you ought to acknowledge the misrepresentation and apologize for having perpetrated it. What is especially troubling is that you are doing so to my face even after I have just been discussing with you the very article and passage that you are now misrepresenting to me and to other readers of this blog. You are constantly telling me that everyone knows that Hayek said this or that without quoting or even citing the passages that you are referring to. After seeing this brazen misrepresentation of Samuelson, I will never again believe another undocumented or unsourced representation of yours about Hayek (or anyone else for that matter).

“You, on the other hand, have just blatantly misrepresented what Samuelson wrote about Hayek”

David, you’ve got to tell me how I am misrepresenting Samuelson.

I’m not seeing it.

Until you do that, I say, baloney, I haven’t misrepresented Samuelson.

The only person doing the misrepresenting is Samuelson, who has a very prominent history of doing exactly that to Hayek — a history shared by Samuelson’s MIT colleagues. There’s a history of misrepresentation founded in ideological and scientific rivalry and failure of comprehension.

It’s unfortunate that Samuelson sought to lower the conversation to the point of bringing in false charges of anti-semitism.

Paul Samuelson,

” Central to his expositions were appraisals of the triad John Maynard Keynes, Joseph A. Schumpeter and Friedrich Hayek on the subject of anti-semitism. .. Hayek, I came to realize, seemed to be the one of the three who at least tried to grow beyond his early conditioning. The full record suggests that he did not succeed fully in cleansing those Augean Stables. Still, a B grade for effort does trump a C-grade.”

We don’t have evidence that Hayek as ‘conditioned’ as an anti-semite — we have suggestive evidence that he wasn’t.

We don’t have evidence of “at least try[ing] to grow” beyond his earlier anti-semitism, because we don’t have evidence of earlier anti-semitism, so we don’t have any grounds for talking about Hayek raising above C-grade anti-semitism to B-grade anti-semitism.

David, I’ve spent 20 years dealing with the bottom-less pit of Hayek myths and misreadings and efforts at marginalization.

Is *sick* of it.

It seems people won’t engage Hayek’s substantive work — beyond the surface stuff — until they figure out that all of these myths and misreadings and efforts at marginalization are intellectual embarrassments.

That is one reason I’ve made it a habit to step on them like bugs.

Folks like Solow and Samuelson essentially don’t know of the existence of the real substance of Hayek alternative to their own work, because they are far to busy polluting the marketplace of ideas with Hayek myths and misreadings and efforts at marginalization are intellectual embarrassments.

We need to clear the pollution away or that is all anyone sees or knows — and you see that every day, folks pointing to the pollution and saying that Hayek and his scientific contribution are beyond the pale, not to be taken seriously, not to be respected, not to by studied, not to be engaged.

Solow and Samuelson know what they are doing in spreading the Hayek myths and misreadings and efforts at marginalization — this is what scientific and ideological rivals have always done.

You suggest Hayek engages in it. It is of course rather famous that Keynes did it to Hayek. And it’s right in our face that Solow and Samuelson have done it.

I think scholars and academics shouldn’t have anything to do with legitimizing it.

One again, support your charge that I’ve misrepresented Samuelson.

I have no problem correcting something and getting it right if I’ve gotten something wrong.

I’m not out to misrepresent anyone.

I’m out to squish bugs and put the kabosh on all of these idiot and often self-serving or paradigm-serving or ideology-serving rat hole Hayek myths and misreadings and efforts at marginalization

“This was the period when Samuelson gives Hayek a solid “C” as an anti-Semite.”

Where does Samuelson give Hayek a solid C as an anti-Semite?

You just quoted Samuelson as saying:

“Hayek, I came to realize, seemed to be the one of the three who at least tried to grow beyond his early conditioning. The full record suggests that he did not succeed fully in cleansing those Augean Stables. Still, a B grade for effort does trump a C-grade.”

So Samuelson gives Hayek a B-grade not a C-grade as you falsely state. And the grade is for effort, not for anti-Semitism, as you falsely and inexplicably assert. The effort that Samuelson is explicitly grading him on is the effort in overcoming the anti-Semitism of the environment in which Hayek was raised. We both agree with Samuelson that Hayek was raised in an anti-Semitic environment, and we both agree that he succeeded. I infer from the B-grade that Samuelson felt that Hayek largely succeeded, but not completely. For you to characterize this grade as a smear on Samuelson’s part is just mind-boggling to me. And to top it off you can’t even tell the difference between a C and B.

And by the way, as we are on the subject of your ability to read and to convey accurately to others the substance of what you have read, I notice that in recent Tweets you have taken to referring to me as “self-admittedly no expert on Hayek.” Since I have no recollection of having ever offered a self-assessment, one way or the other, of my expertise on Hayek, I would be curious know where exactly you found the admission that you are referring to.

Someone who moves up to a “B” for trying & overcoming his earlier anti-semitic ‘conditioning’ is someone who started below a “B”.

I said Samuelson identified Hayek as a C-grade anti-semite as a young man — before he started to “try” and “moved” up to a B-grade.

Here it is again:

”Central to his expositions were appraisals of the triad John Maynard Keynes, Joseph A. Schumpeter and Friedrich Hayek on the subject of anti-semitism. .. Hayek, I came to realize, seemed to be the one of the three who at least tried to grow beyond his early conditioning. The full record suggests that he did not succeed fully in cleansing those Augean Stables. Still, a B grade for effort does trump a C-grade.”

This is a rat-hole time waster — just like all of these Hayek myths, misreadings and efforts at marginalization.

You misread Samuelson, then you misread me. Then you tell me I can’t read.

“Tweets you have taken to referring to me as “self-admittedly no expert on Hayek.” Since I have no recollection of having ever offered a self-assessment, one way or the other, of my expertise on Hayek,a self-assessment, one way or the other, of my expertise on Hayek.”

That was my recollection. My recollection is a crude and imperfect remembering of what you said here:

David,

“I may not be doing Hayek or you justice in staying within this theoretical framework, but, much as a admire Hayek and enjoy exchanging ideas with you about him, Hayek is not my primary theoretical or practical interest at the moment, and you’ll just have to accept my limitations. Sorry, but that’s the best I can do.”

Not your primary interest; an area were people need to accept your limitations.

When a historian of biology tells me that Charles Darwin and his scientific explanatory effort is not his primary interest, and and area where we must accept his limitations, I read that as someone telling me he is not a Charles Darwin expert.

I don’t think that’s not particularly uncharitable, as a necessarily condensed way of distilling it in one word.

A conversational community requires eliminating talk at cross purposes based in fundamental mythologies — people have been working for 30 years to clear the decks of these mythologies, and to let people know when they are stepping off into a conversation on the a false and ungrounded foot.

Some of this mythological talk and talk at cross purposes is motivated by efforts at marginalization. Some of it is natural between folks working in rival alternative conceptual explanatory systems (see Peter Boettke and Thomas Kuhn on this).

One of my purposes has been to red-flag this falsely grounded cross-talk so that undergraduates or graduate students in various departments can actually engage in productive conversation without being road-blocked by folks putting up a big vampire blocking cross (to use a metaphor) filled with mythologies and false premises.

Almost every conversation that touches on Hayek is dominated by these, whether false mythologies about the nature of science or false mythologies about Hayek’s explanatory strategy, or false mythologies about the contents of Hayek’s explanatory mechanisms in The Road to Serfdom.

Thirty years on — with a figure of Hayek’s now recognized significance — is far to long for use to be not much farther along than when Don Lavoie wrote Rivalry and Central Planning or Gerald Edelman wrote his appreciation of Hayek’s global brain theory, and 30 years on since the beginning of all of Bruce Caldwell’s very solid work.

How many books and papers have been written on how Hayek’s treatment of real world process of competition and price signaling differs from the assumptions embedded in most of the published work we can historically trace as descending from Hayek’s papers on “information economics”?

Yet I can’t say that without getting push back — and then often told that no one who matters wastes there time on Hayek, so the conversation isn’t even intellectual respectable — it’s no one’s particular area of interest, and its an understandable and excusable limitation of understanding.

We can talk about Hayek, get this wrong, and its excusable because Hayek doesn’t really matter anyway.

So we are suppose to conduct all Hayek conversations from a starting point of false understanding, and we are suppose to just eat the necessity of continuing with a conversation taking place in the arena of false premises.

If we were talking about Charles Darwin, and Aristotelian biologists (as happened on the Continent) were enforcing a false conversation ()based on false premises about Darwin, no one would stand for it, and I wouldn’t stand for it. I don’t stand for it with Hayek, either.

“Someone who moves up to a “B” for trying & overcoming his earlier anti-Semitic ‘conditioning’ is someone who started below a “B”.”

Oh please. Now you are just being silly.

“You misread Samuelson, then you misread me. Then you tell me I can’t read.

“Baloney.

“What’s the agenda here, David?”

Greg, if you can’t tell what the agenda is, maybe it’s because there isn’t any.

I make no pretensions to expertise on Hayek, whether I am considered an expert or not doesn’t concern me. I just thought that it was interesting that you found it necessary to underscore my lack of expertise on Hayek in a tweet about my post on Cantillon Effects, which seems to have been received favorably by you. And so, not recalling any such self-assessment, I wondered what exactly was the textual basis for your assertion about me, and also how your reading skills in this case match up with your reading skills in other cases. Now I know.

And something I picked up in seeing how you fundamentally misunderstood what Hayek was saying in his piece on Hicks.

In the Tweet I wanted to recommend your remark without misleading people into thinking you were giving the full, on target story.

As for reading Samuelson, whatever.

I don’t take either you or Samuelson as experts on the rise of popular anti-semitism in Vienna at the turn of the century, nor experts on the culture within Hayek’s immediate family. Hayek’s family had intermarried with Jews and his mother played with her Jewish cousins, so the family culture is at least complex.

Samuelson clearly says that Hayek was anti-semitic as a young person.

No evidence for this, as there is in Keynes teen writings.

Counter-evidence in Hayek’s activities and actions.

And then there is the clear statement that Hayek made an effort to try to overcome his anti-semitism.

So he gets a grade change, a bump over Keynes who didn’t try.

A ‘B’ for effort.

My reading skills aren’t so bad. It’s ‘silly’ to debate this.

You are offended because I’ve bluntly raised a red flag at your core failures to get Hayek’s explanatory strategy, how Hayek uses formal constructs, etc.

It’s sometimes impolite to say out loud what must be said.

I’d rather not waist the time in the effort to sugar coat. Mostly because I’m pressed for time.

Greg, If I make no pretensions to expertise on Hayek, that is not the same as admitting that I am not an expert on Hayek, so you obviously do have a reading problem.

Whatever you may think of my understanding of Hayek’s piece on Hicks, it does not constitute an admission of lack of expertise. You can tweet whatever you want to, but your characterization of what I am admitting to involves your putting words in my mouth.

As for Samuelson, he says that Hayek grew up in an environment in which anti-Semitism was widespread and that he largely overcame that influence (not the same as overcoming his anti-semitism). You are the one who is choosing to read into Samuelson’s words a personal attack on Hayek; it’s not there unless you choose to put it there.

And now, on top of ascribing evil motives to Samuelson, you presume to read my mind:

I categorically deny that I am offended by your accusations that I have failed to understand Hayek. But I am completely exasperated by the way you distort straightforward English sentences to fit into your view of the world. Don’t you realize how unpleasant and unreasonable you are being?

“If I make no pretensions to expertise on Hayek, that is not the same as admitting that I am not an expert on Hayek, so you obviously do have a reading problem.”

Who has time to parse such sentences or distinctions in a blog comments section in this lifetime? Or in Twitter tweets?

I don’t see how I’ve possibly misread Samuelson, and I don’t see that I’ve described him as evil. I’ve described him as a motivated and well as suffering from cross paradigm failures of understanding, failures of understanding that motivation of a different kind could overcome. I don’t describe that motivation as evil, but I do identify it as in part coming out of scientific and ideological rivalry. James Watson describes the same sort of thing on his own part in the DNA discovery adventure. Watson doesn’t describe himself as evil. He describes himself as human.

I’m glad I didn’t offend you, because I feared I had, and I don’t aim to.

I don’t get the unreasonable charge. My reading of Samuelson is not unreasonable. A grade bumped up for effort had to be bumped up from something lower. That is the simple logic of the English language.

All histories I have read say that the post-1848 virulent strain of anti-semitism came into Vienna some time around the turn of the century, and this was a new phenomena. We don’t know that the Hayek family consumed that stuff — I haven’t seen any history that says this stuff was universal, it seems not to have been.

I don’t know the Hayek family’s relation to this other than that his mother played with the Wittgensteins — who were family — at the Wittgenstein house.

Starting with the premise that Hayek was a child or teenage anti-semite is a premise I am not comfortable with.

Perhaps he was. Perhaps he wasn’t.

Did Hayek read the new anti-semitic newspapers as a child? I’m not going to presume that he did.

Did he see anti-semitism? Of course.

How Hayek felt about or how he digested that we can only guess by his actions — creating his own youth organizations which broke existing ethnic barriers.

I’d like to know more about the relation of the Hayek family to all of this, what individual Hayek’s thought of their being joined by marriage to the Wittgenstein family, what the relation of Hayek’s father was to the doctors and academics who were Jewish. And so on.

But I’m not going to credit Samuelson for some sort of competent insight into the matter of “Hayek’s anti-semitism” of to give Samuelson credit for being able to grade the different levels of “Hayek’s anti-semitism” across his life. That is ridiculous, especially when Samuelson does so in the absence of any direct supporting evidence, and in complete ignorance of a good deal of compelling direct counter evidence.

On other matters, I certainly apologize for being unpleasant.

I really am very, very tired of all of the Hayek mythologies and basic failures of comprehension which continue to be propagated in all forums, from peer reviewed work on down — and the endless falsely premised conversations that I believed could be corrected if folks where motivated to care enough to master the material.

The conversation is improving, but incredibly slowly.

I’m sometimes direct and to the point — blunt if you will.

Time is short, and being less blunt takes a whole lot of time.

The short cut to red flagging a mis-cast conversation is simply to say so — “this conversation is miscast”.

It’s hard to say that without coming across as rude — or as ‘rudely’ claiming some sort of interpretive authority.

I don’t know what to do but to offer apologies. When people on on the right track I say say. When in my well considered judgment that are off track I say so.

And I certainly do mean to derail miscast conversations.

So productive ones just possibly might flourish.

Look at the Scott Sumner rat hole of a conversation (rat hole is Leo Laporte’s expression for a detour conversation) on Sheldon Richman.

Do I read you wrong is saying that much of it was not on point and wasn’t productive and didn’t have much to do with Hayekian/Austrian macro, as Scott repeatedly brought them into the conversation?

Scott has done this for years know. Sometimes he’s even acknowledged it — using false presumptions about Hayek’s macro to launch a falsely premised and falsely cast conversation.

And then a thousand tenured professors think Sumner’s false invention IS Hayek.

That is not a problem for you, but that is a problem for anyone who want to pursue work which takes Hayek seriously in academic circles.

Greg, This exchange has gone on long enough. I think that you read more into what I wrote about my knowledge of Hayek than I intended, and I think that you read more into what Samuelson wrote than he intended. That was all I was saying. Nor did I accuse you of saying that Samuelson is evil. I said that you were ascribing evil motives to Samuelson in accusing him of calling Hayek an anti-Semite. Calling someone an anti-Semite based on nothing more than cross-paradigm failures of understanding and academic rivalry strikes me as an evil motivation. I don’t see how you can just walk away from that. You now compare Samuelson with J. D. Watson. I am only vaguely familiar with Watson’s work and his conduct, but my impression is that his conduct was often reprehensible. He may not have described his motives as evil, but someone else might not think it inaccurate. But at least Watson had something to gain from what he did. According to your version of what he did, Samuelson was motivated not by self-interest but by personal spite.

Every time you describe what Samuelson says you misinterpret him. He gave Hayek a B-grade for making the personal effort to rise above his environment. That is not the same as saying: Hayek was anti-Semite, but he tried not to be, so I am raising his grade. That’s just an obtuse reading. Samuelson was obviously writing in his usual breezy style, and despite the signature condescending tone (which no doubt really annoys you) he wrote about Hayek in a benevolent spirit comparing him favorably with Keynes and Schumpeter who were unable to rise above their upbringing as Hayek, in Samuelson’s view, did for the most part. The premise that Hayek started as a teenage anti-Semite is yours not Samuelson’s. All he said is that Hayek came from an environment, as Keynes and Schumpeter did, that had a high propensity to produce anti-Semites, and the extent to which his conduct was for the most part free of traces of that environmental conditioning was to his credit. I do agree with you that it was mildly offensive on Samuelson’s part to presume to grade Hayek for effort, but Samuelson was presumptuous and condescending, but not mean-spirited. There was at worst a failure of etiquette on Samuelson’s part in his manner of expression.

As for the rest, I will just let it be. Let’s move on, but if you want to respond, I will let you have the last word (unless I change my mind).:)

David Glasner is a model of patience and good-natured conversation with Greg Ransom. It amazes me to see how the blogosphere treats Greg Ransom with a reverence that someone who has yet to publish an academic article on Hayek may not really merit.

“as for your reformulation of Hayak’s central thesis that comprehensive central planning could be carried out effectively only by a government exercising unlimited power over individuals that simply is not true.

Stop for a minute. In the Obamacare case it was agreed by all that the States had the power, under their police power, to adopt compulsory insurance laws. Such does not mean that the states have unlimited power over individuals”

Clearly John does not know what ‘comprehensive central planning’ is. (Hint is is not Obamacare whatever its merits otherwise). Indeed Obamacare is an unfortunate example because in the Constitution of Liberty Hayek explicitly gives the OK to making people buy insurance.

“Hayek wouldn’t pass the first day of law school”

Hayek’s degree was in Law, & Economics. It was compulsory to study law to do economics at the university of Vienna.

“I’ll end where I started. Of what use is Hayek to the people seeking freedom in Tahrir Square, today? Are private police the answer? Why are we not seeing blogs and news stories that the solution is private police?”

This is really face-palm time here. That is clearly a chapter of the Constitution of Liberty I forgot to read.

“There is nothing complex, nuanced, or useful about Hayek. I challenge anyone to find anything applicable to Egypt, today, that was not said earlier and better and in a more useful way by someone else, most often one of our Founding Fathers”

As it happens the what would become the Constitution of Liberty began as a series of lectures given in Cairo. And he actually did not claim originality for that book, claiming he tried to reinterpret the Scottish enlightenment liberalism for the twentieth century. But clearly a country in the middle of writing a new constitution should be taking such ideas into account. And I personally would like to see a country implement what Hayek called his “one invention” which was a constitution that completely separates the law making and executive bodies.

NOVEMBER 17-19, 2006
Milton Friedman and the Economics of Empire
The Road from Serfdom
by Professor Greg Grandin New York University

Like Friedman, Hayek glimpsed in Pinochet the avatar of true freedom, who would rule as a dictator only for a “transitional period,” only as long as needed to reverse decades of state regulation. “My personal preference,” he told a Chilean interviewer, “leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism.” In a letter to the London Times he defended the junta, reporting that he had “not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende.” Of course, the thousands executed and tens of thousands tortured by Pinochet’s regime weren’t talking.

Hayek’s University of Chicago colleague Milton Friedman got the grief, but it was Hayek who served as the true inspiration for Chile’s capitalist crusaders. It was Hayek who depicted Allende’s regime as a way station between Chile’s postwar welfare state and a hypothetical totalitarian future. Accordingly, the Junta justified its terror as needed not only to prevent Chile from turning into a Stalinist gulag but to sweep away fifty years of tariffs, subsidies, capital controls, labor legislation, and social welfare provisions — a “half century of errors,” according to finance minister Sergio De Castro, that was leading Chile down its own road to serfdom.

“To us, it was a revolution,” said government economist Miguel Kast, an Opus Dei member and follower of both Hayek and American Enterprise Institute theologian Michael Novak. The Chicago economists had set out to affect, radically and immediately, a “foundational” conversion of Chilean society, to obliterate its “pseudo-democracy” (prior to 1973, Chile enjoyed one of the most durable constitutional democracies in the Americas).

William, Thanks for your kind comment about me. I actually wasn’t aware that Greg, who really does have his good points, is treated with such reverence, but I am probably not visiting the right blogs.

Nicholas, Yes the Constitution of Liberty grew out of a series of lectures given in Cairo, I believe at the invitation of the central bank of Egypt (probably under the monarchy that was ousted in a military coup headed by Colonel Nasser) on the development of the political doctrine of the rule of law or something of that nature. It is hard to say exactly what was original and what wasn’t in the Constitution of Liberty because Hayek wrote with such great erudition he traced many of his ideas back to earlier sources, but what he came up with was very much informed by original ideas about the spontaneous orders and the role of rule-following in bringing about such orders and so the final result was, in my view, a work of truly great originality.

Jan, Hayek was certainly very badly mistaken in his assessment of Pinochet. But Pinochet’s crimes don’t necessarily absolve Allende from his role in creating the conditions under which Pinochet could seize power. Sometimes there are very bad choices that people face. Under the circumstances, it was not necessarily wrong to say that Pinochet was the lesser evil, but Hayek went way beyond that, and that was a very stupid and tragic mistake on his part. But Hayek is not the only very smart person who has been duped into making very bad political choices. Sartre defended to Stalin, J.K. Galbraith and many others went to China during the Cultural Revolution and came back gushing about Chairman Mao, and the list of prominent Castro admirers is pretty long as well. For the most part, we don’t go around saying that having given rhetorical support to Stalin, Mao, or Castro is automatic grounds for discrediting a person’s entire life’s work. Martin Heidegger was an active supporter of Hitler and was largely rehabilitated after the war even though it is not at all clear that he really repented of his misdeeds. He is in the estimation of many the most important philosopher of the twentieth century.

David, we have different opinions about who’s reading of Samuelson is obtuse.

On another matter, I simply don’t throw around the word ‘evil’ as easily as you feel comfortable tossing the term around.

Samuelson is not an evil man doing evil things.

I don’t put academics on weird pedestals, as if they are extra-human.

I’ve listened to a top philosopher of science tell me he *never* credits or cites Karl Popper or his work *ever* as an intentional professional blackball of the man.

I raise this example not to say the Samuelson has done *exactly* this thing.

It’s to point out that academics are no different from everyday people in there capacity for all sorts of very human self-interested or “my team vs the other team” behavior falling well below the thresh hold of genuine human evil.

In all sorts of ways folks working in rival scientific paradigms or in rival political ideologies exploit the whole panoply of informal argumentative fallacies and book of insults to signal to others that their rivals are not the ones to be taking seriously, are no the ones who are scientific, are not the ones who are modern, cool, advanced, with the in crowd, what have you.

About Me

David Glasner
Washington, DC

I am an economist at the Federal Trade Commission. Nothing that you read on this blog necessarily reflects the views of the FTC or the individual commissioners. Although I work at the FTC as an antitrust economist, most of my research and writing has been on monetary economics and policy and the history of monetary theory. In my book Free Banking and Monetary Reform, I argued for a non-Monetarist non-Keynesian approach to monetary policy, based on a theory of a competitive supply of money. Over the years, I have become increasingly impressed by the similarities between my approach and that of R. G. Hawtrey and hope to bring Hawtrey's unduly neglected contributions to the attention of a wider audience.